Good morning!
Soybeans sharply higher overnight... Soybean futures posted strong gains overnight in reaction to the U.S./China temporary cut to tariffs, while corn marked mild gains and wheat was choppy. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents higher, soybeans are 18 to 19 cents higher, winter wheat markets are 1 to 2 cents higher and spring wheat is around a penny lower. The U.S. dollar index is up nearly 1,400 points and front-month crude oil futures are around $2.50 higher.
U.S., China to slash tariffs for 90 days... The U.S. and China have agreed to dramatically reduce tariffs on each other’s goods for a 90-day period following high-level talks in Geneva, Switzerland. U.S. tariffs on Chinese imports will drop from 145% to 30%, while Chinese tariffs on U.S. goods will be reduced from 125% to 10%. The tariff reductions take effect on Wednesday and apply to most of the duties imposed in April, covering a wide range of consumer and industrial goods. Negotiators agreed to meet regularly over the next three months. The spotlight now shifts to whether both sides can convert the 90-day window into a durable deal.
Japan signals increasing corn imports as part of U.S. trade talks, won’t bend on auto tariffs... Japanese Prime Minister Shigeru Ishiba signaled that increasing corn imports from the U.S. would be among options in trade negotiations with Washington, but warned Japan would never sacrifice its agriculture industry to obtain lower auto tariffs. Japan has made little headway in two rounds of trade talks with the United States. Agreeing to buy more corn is a less controversial option for Japan than increasing rice imports. Japan’s top trade negotiator, Ryosei Akazawa, said he won’t waver in his demand for the U.S. to eliminate all the tariffs imposed by the Trump administration.
USDA’s May crop reports out later this morning... USDA will release its Supply & Demand and Crop Production Reports at 11:00 a.m. CT. They will feature updates to the old-crop balance sheets and the first official look at the 2025-26 marketing year, including USDA’s initial winter wheat production estimate and new-crop corn and soybean production projections based on March planting intentions and trendline yields. Click here to view pre-report expectations.
APK-Inform cuts Ukraine grain production forecast... Analyst APK-Inform cut its 2025 grain production forecast for Ukraine by 3.8% to 55.3 MMT, largely because of an expected smaller corn crop. APK-Inform now projects Ukraine’s corn production at 27 MMT, down 7.3% from its prior outlook. The firm cut its 2025-26 grain export forecast by 4% (1.7) MMT to 40.9 MMT.
India’s monsoon to arrive early, boosting crop prospects... India’s summer monsoon is forecast to hit the southern coast on May 27, five days earlier than normal, marking the earliest onset in at least five years, the India Meteorological Department (IMD) said. The early arrival raises hopes for bumper harvests of key crops like rice, corn and soybeans, and could help stabilize global food prices.
Japan’s rice prices dip after extended surge... Japanese supermarket rice prices fell for the first time in 18 weeks, averaging 4,214 yen ($28.52) per 5 kg in the week ended May 4 — a 19-yen drop from the prior week, according to the agriculture ministry. Despite the decline, prices remain double those from a year ago. This is the first time consumer rice prices have dropped since Japan decided in March to release government rice stockpiles monthly through July to help control costs.
The week ahead in Washington... The House Ag Committee will begin its markup of the budget reconciliation package on Tuesday evening. The committee is under pressure to identify $230 billion in cuts over the next decade, with major changes proposed to nutrition assistance, farm safety nets and agricultural trade programs. USDA Secretary Rollins will travel to the United Kingdom Monday through Wednesday for her first overseas trade mission. The trip follows the announcement of a new U.S./UK trade agreement late last week. The White House is preparing to unveil the first major report from the Make America Healthy Again (MAHA) Commission. On the economic front, U.S. consumer inflation data will be released on Tuesday, with producer prices slated for Thursday.
China’s deflationary concerns persist amid trade concerns, weak domestic demand... China’s consumer prices dropped 0.1% annually in April, maintaining the pace from March. This marked the third consecutive month of consumer deflation. China’s food prices fell 0.2% from year-ago, with pork price growth easing to 5.0%. China’s producer prices fell 2.7%, the 31st straight month of producer deflation and the steepest pace since last October.
Judge halts Trump’s federal downsizing efforts... A federal judge issued a temporary restraining order requiring USDA and 20 other federal agencies to pause all reductions in force (RIFs) and restructuring plans through at least May 23, marking the strongest judicial intervention yet in the Trump administration’s efforts to shrink the federal workforce. Judge Susan Illston of the U.S. District Court for the Northern District of California ruled Trump’s sweeping downsizing plans likely exceed executive authority and require Congressional approval for major reorganizations. She cited the constitutional balance of powers and emphasized the legal limits of executive action. A court hearing is scheduled for May 22 to determine whether to convert the temporary order into a longer-term injunction.
U.S. suspends Mexican live animal imports over screwworm threat... USDA Secretary Brooke Rollins on Sunday announced the suspension of live cattle, horse and bison imports through ports of entry along the U.S./Mexico border in response to the rapid northward advance of the New World Screwworm (NWS) in Mexico. The ban comes as new detections were confirmed as far north as Oaxaca and Veracruz — just 700 miles from the U.S. border. Despite joint eradication efforts with Mexico, Rollins called the screwworm’s continued spread “unacceptable” and said the move is necessary to protect U.S. livestock and national food security. USDA is deploying Tick Riders – horse-mounted patrol inspectors – to monitor livestock and wildlife along the southern border for signs of infestation. Mexican Ag Minister Julio Berdegue swiftly rebuked the action, but said he hoped the two countries could soon come to an agreement over the pest.
Cattle futures could challenge all-time high... Cattle futures will be supported by another record high in the cash cattle market last week and the closing of the Mexican border. Nearby futures may challenge the all-time high of $217.675 posted in late April on the continuation chart.
Cash hog index slips again, pork cutout rebounds... The CME lean hog index is down 8 cents to $89.99 as of May 8, the second straight daily decline after a three-week string of gains. May lean hog futures, which expire Wednesday and are settled against the cash index on May 16, finished Friday 38.5 cents above today’s quote. Pork cutout jumped $3.33 to $97.83 on Friday as all cuts except bellies firmed, holding within the sideways trading range of since early February.
Weekend demand news... Exporters reported no tenders or sales.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 11:00 a.m. WASDE Report — WAOB
- 11:00 a.m. Crop Production — NASS
- 11:00 a.m. Cotton Ginnings - Annual — NASS
- 11:15 a.m. Cotton: World Markets and Trade — FAS
- 11:15 a.m. Grains: World Markets and Trade — FAS
- 11:15 a.m. Oilseeds: World Markets and Trade — FAS
- 11:15 a.m. World Agricultural Production — FAS
- 3:00 pm Crop Progress — NASS